Slough council poised to take over freehold of property and pay for safety work as current owner refuses to foot bill A landlord who is refusing to pay an estimated £4m bill to make safe a block of flats built with Grenfell-style cladding is likely to be bailed out by the taxpayer.

LKP wrote to Slough Council about this site as long ago as October last year when Martin Boyd of LKP wrote to Sloughs Chief Executive on 26th of October:

“We understand that Slough Council has purchased the freehold for the block known as Nova Tower which had been owned by a private landlord.

“Can we urgently ask you to advise the APPG on Leasehold and Commonhold Reform with an update on the current position and the authority’s proposals for addressing the cladding problems at Nova Tower.

“We are particularly interested to understand the authorities proposals for passing on both short and long term costs to the leaseholders as well as any dates by which the cladding will be rectified.”

Despite an assurance from the Chief Execs PA on 6th November advising that official would revert to LKP and the APPG we have not heard anything back on over 2 months.

The Guardian quotes Mohammed Nazir, Slough cabinet member for corporate finance and housing:

“We simply do not believe the current freeholder has the capacity to do the work that is needed to safeguard the safety of residents.

“We will not put a price on our residents’ lives and their safety remains our priority.”

The Guardian claims that the building is likely to be handed over for a nominal price.

But if Slough pays for fire marshals and to remove the Grenfell at the 68-flat site – which LKP believes is highly unlikely – it will mean cuts to other spending, officials made clear. Its budget has already been cut by £19m over the past three years.

How can Slough council assume financial costs for Nova House on behalf of private leaseholders to the detriment of those without housing of any sort, for whom it does have legal liability?

The Guardian quotes Nigel Glen, the CEO of the Association of Residential Managing Agents (ARMA), saying:

“The government has suggested that landlords should pay for the works but there is no suggestion that anyone has acted inappropriately or cut corners, rather that building control approved and signed off the various types of cladding at the time and have only now tested those very systems and found them unsuitable.”

In fact, The Times has run a front page report on the huge bills run up by freeholders for fire marshals owing to Grenfell cladding.

Freeholders have legal liability to ensure these buildings are safe, and as they are confident leaseholders will pick up the bill, there is no incentive to control costs.

The Guardian says Robert Steinhouse’s company, Ground Rent Estates 5 Ltd, estimates the cost of re-cladding at £1m, with a further £500,000 for fixing sub-standard fire compartmentalisation inside the building which means that fire would spread faster than it should.

Sources at the council suggested the total could be as high as £4m.

Ground Rent Estates has made an insurance claim on behalf of the leaseholders to cover the cost but said in a statement that if that fails “[leaseholders] will be liable for the costs”.

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Comments

“There might, just conceivably, be a silver lining to the fire trap cladding debacle?

We know long leasehold is like a legal scam. Deliberately designed so. The problem with knowing this and saying it is that nobody listens to such simple slogans.

The cladding scandal exposes the stark reality of long leasehold in simple terms easy even for the media to see: its whole purpose is to pass on all costs to leaseholders while leaving freeholders with a cost-free, reliable and profitable investment. With the added bonus of being called landlords with all that English law bestows on this term.

Even if Sajid Javid and others do not yet know it, freeholders are not the ordinary kind of landlord and have no liability for any cost (subject to keeping within the one-sided lease and reasonableness). Governments made this so.

Maybe now they will know and see what they created.

It is ironic that freeholders can devise fees for consents on almost any action taken by a home-owner, from changing carpets, fitting a shower, or just repainting the front door, all on the claim that the ‘landlord’ needs to protect their building/investment.

Yet seemingly while focusing on shower cubicles and carpets inside the demised lease, ‘landlords’ of long leasehold can turn the whole building into a fire trap, or fail to maintain the integrity of compartmentation, or run unprotected gas pipes up the single escape stairwell etc, or introduce pretty much any other hazard to health and welfare and significantly devalue leases thereby, and do all this entirely unfettered of the views/wishes of the actual home owners who must pay for it all, because that is how long leasehold is designed to work in England and Wales.

The added horrific twist, as often pointed out by LKP, is that unlike a real landlord a freeholder has a minimal financial stake in the building while gaining all this unfettered power.

I never trust any theological graphs of relativity or so-called ‘No Act World’ second guessing of market values, as these all seem designed to maximise profit for the investor, but all the graphs support the principle that the cost of the freehold for much of the term of long leases can be far less than the cost of even one long lease thereon.

Developers profit handsomely from selling leaseholds (at no discernible or proven discount) and all that follows for freeholders is sheer profit without liability. If the freehold is sold on the stake can still be 1% to 5% of the full market value.

What does the freeholder get for investing less than the value of one lease? A ‘reversionary’ interest in the premises.

Interesting how this interest works. Case law shows that a freeholder at any stage during the term of the leases can claim a landlord’s ‘human right’ to add more units on the top of the premises, and thus sell more leases. Literally over the heads of the existing occupiers or an existing RTM company’s objections.

Think about this. While not actually PAYING anything for the premises itself, a freeholder apparently OWNS it now, not in the future, and has the right to change it without needing consent of leaseholders within it?

Governments created this state of affairs. This is why I say they are collective eejits. Passing laws that damage real lives while expending their energy on party politics.

Seems to me that much of the law and regulations applied in the UK are undermined by the legislators themselves. If they meant thigns as they are then they are cads and bounders. Otherwise it is the result of something government seems expert at: passing laws of unintended consequences.

As a mere layman I’m not sure I trust that anyone really understands a ‘reversionary’ interest versus a here and now interest, or why the first should be treated the same as the second to allow unfettered behaviour by freeholders, but it seems to be so given what courts allow freeholders to do.

Long Leasehold must be abolished. Like slavery in its time it has got away with far too much cynical exploitation of ordinary people for far too long.

The cladding debacle should be the final nail in leasehold’s coffin, along with reform of residential building standards and liabilities.”

According to minutes of a council cabinet meeting held in June 2014, it seems there were 12 leaseholders in Grenfell. The rest were tenancies.

The works minuted – which includes thermal cladding to the building – were classed as improvements and not recharged to the 12 leaseholders. Thankfully I can’t find evidence that any leaseholders actually died, but of course all were made homeless.

It is interesting to me that thermal cladding to the building was classed as an improvement and not recharged under the leases.

Grenfell contained only a small number of leaseholders of course. However, this fact might or might not assist private block leaseholders with similar cladding if it was added and later found wanting?

Grenfell Cladding

Victoria, one of Australia’s eight states/ territories, has put aside £330m to remediate Grenfell cladding: England has come up with £200m By Sebastian O’Kelly Mansfield College, Oxford, hosted a fascinating one-day conference yesterday into the Grenfell tragedy and its devastating repercussions to flat owners in blocks with similar cladding across the world. Lawyers predominated, but […]

Barratt has insisted on the evacuation of the Citiscape tower block which has Grenfell cladding. It is understood that engineers for the developer have found flaws in structural piers at site, and that residents are being rehoused immediately. It is anticipated that most residents in the 100 flats will only be evacuated for a few […]

By Harry Scoffin The former health and safety commissioner tasked to investigate building standards following the Grenfell Tower fire has criticised government for allowing it “to take so long” to agree her blueprint for maintaining the integrity of high-rise residential blocks. In comments to the Communities Select Committee on Monday, Dame Judith Hackitt also raised […]

The disaster of flammable cladding on blocks of flats and what to do about it is providing the biggest push to transform leasehold law since the eruption of the doubling ground rent scandal which we exposed in 2016. The question being asked is: what is the third-party freehold owning landlord actually for? For ground rent […]

But housing minister says further funding must come from the building owners. (Hasn’t that been tried before?) By Harry Scoffin The Guardian reports that leaseholders across 12 sites in Manchester are preparing to take the government to court over their policy towards fire safety problems with privately-owned tower blocks. Although government has recently pledged £200m […]

And what the balconies were like before the fire: LKP has been informed that the headlease owner of De Pass Gardens on Barking Riverside, which witnessed a serious fire today, is Adriatic Land 4. These companies are part of the £1.6 billion ground rent fund Long Harbour. The ultimate beneficial ownership of these freeholds / […]

This is the first site in England to begin legal action against its landlord and developer The action taken by the leaseholders is against Galliard Homes Ltd and the site’s landord Roamquest Ltd a firm owned in Galliard Holdings Ltd and NCQ Development Ltd which in turn is owned by Galliard Homes Ltd The leaseholders […]

UPDATING … A £200 million fund to remove Grenfell cladding from private blocks was announced this morning by Communities Secretary James Brokenshire on the BBCR4 Today programme. It can be heard at 07.10 here This action has been long predicted by LKP, believing that ministers’ appeals to freeholders and developers to “do the decent thing” […]

Leaseholders at Paddington Walk have paid out £3.5 million to remove Grenfell cladding from the site, even though ministers have said leaseholders should not pay. An additional bill of £5.4 million is on the way, according to Inside Housing. The site was built in 2005 by European Land and Property, a joint venture development company […]

Today sees the launch of a campaign calling on the government to help fund the recladding of the private blocks impacted by ACM cladding led by InsideHousing in support of the UK Cladding Action Group (UKCAG). LKP is proud to help support this campaign along with many other groups and MPs including leasehold and commonhold […]

A campaign group of leaseholders in private blocks with Grenfell cladding is being formed. It is calling itself the UK Cladding Action Group: UKCAG and can be contacted here: ukcladdingactiongroup@gmail.com LKP welcomes the initiative and will do all that it can to assist. The Guardian reports: “Only 10 of the 173 private buildings discovered with […]

In yet another retreat by plc house builders, the Aussie giant Lendlease is stumping up to pay to remove the Grenfell cladding at Vallea Court and Cypress Place, in Manchester’s Green Quarter. Before government ministers start talking rubbish about “freeholders doing the decent thing” – or worse, describing these speculators in residential freehold income streams […]

The government was under attack in the Commons today over its inactivity over Grenfell cladding in private blocks of flats. John Healey, Labour shadow housing secretary, made a powerful attack on Housing minister Kit Malthouse, asking “if the government cannot deal with this, what is it in office for?” Mr Malthouse said, “as a result […]

“For residents in private sector buildings identified as having this accelerant-type cladding we were often hopeful and encouraged by Government assurances from James Brokenshire and Kit Malthouse, that the cost will be met, not by leaseholders, but by the freeholder or developers. In a statement regarding this issue, Brokenshire threatened that if they did not […]

But hints that it would have liked to help, if only the ‘existential threat’ of leasehold reforms were dropped … The Tchenguiz organisation has said that the government should stop demanding that freeholders pay to remove Grenfell cladding from 272 private apartment blocks. It is a “hollow threat and it knows it”, says William Kenneth […]

Anger has erupted in Manchester after Australian building group Lendlease was awarded a £330 million contract to refurbish the city hall – while declining to help remove Grenfell cladding from its private sites in the city. Lendlease refuses to contribute to remove cladding at two sites in Green Quarter, Vallea Court and Cypress Place which […]

In today’s Financial Times interview, Vincent Tchenguiz says the sale of his Fairhold Securitisation Limited has collapsed because of buyers’ concerns over government reforms to leasehold. Vincent Tchenguiz pushes back on UK leasehold reform Property tycoon Vincent Tchenguiz is lobbying against proposed changes to the leasehold system that his company says threaten “unintended detrimental […]

Twelve months ago the leaseholders in Citiscape Croydon were in a very dark place. They were being taken to the Tribunal by FirstPort to prove that they should be liable for cladding costs, which were estimated at over £2 million – over £20,000 per flat. The leaseholders had been given poor advice by LEASE on […]

The FT today reports that government hopes that speculators in residential freeholds – especially anonymous ones hidden offshore – are unlikely to pay up to remove Grenfell cladding. The article coincided with reports of Places for People, freeholder of Leeds Saxton, issuing a non-repayable loan to leaseholders and pursuing a claim against warranty provider NHBC. […]

Slough Council – which made the unaccountable decision to buy the freehold of Grenfell cladding site Nova House for £1 – was in tribunal earlier last week against a formidable opponent, Benjamin Pell, better know to journalists as Benji the Binman. Mr Pell, who came to national attention after raiding the dustbins of London’s leading […]

The government is persisting with its argument that “building owners” must pay up to remove Grenfell cladding from their sites – even though the law has said that they don’t pay, leaseholders do. The statement today from Communities Secretary James Brokenshire says: “Local authorities will get the government’s full backing, including financial support if necessary, […]

Communities Secretary James Brokenshire told the Commons yesterday that freeholders had paid up to remove Grenfell cladding from private blocks. He was replying to a parliamentary question from Hilary Benn concerning astronomic Grenfell cladding costs at Saxton and Skyline Apartments in his Leeds constituency. Mr Brokenshire should understand that the developers who have paid up […]

Sorry, they are just speculators in it for the enforceable income By Martin Boyd Translating freeholder or landlord as “building owner” is a bad idea that has led government to make a mess of its efforts to resolve the issue of Grenfell cladding on private sites. LKP explained to both Dame Judith Hackitt and the […]

By Sebastian O’Kelly Government plans leaked in The Times to force residential freehold speculators to pay to remove Grenfell cladding from private blocks are doomed to fail. The proposals would almost certainly face legal challenges. They are the latest in a series of disastrous announcements, which followed Communities Secretary James Brokenshire reneging on his predecessor […]

Bellway “as a responsible developer” is meeting the bill … So what about the not-so-responsible Lendlease and Ballymore? In yet another triumph of leaseholder activism, Bellway and the Peabody Trust have caved in over the Grenfell cladding costs at New Festival Quarter. The east London site in the constituency of Jim Fitzpatrick, Labour MP for […]

Dublin-based developer Ballymore has bluntly told an MP that leaseholders will have to pay to remove Grenfell ACM cladding panels at New Providence Wharf in Poplar, east London. It joins Aussie developer Lendlease, which is refusing to pay out – or explain why not – at Cypress Place and Vallea Court in Manchester. A figure […]

“Snakes and cladders” is Private Eye’s headline revealing Vuillard Holdings Limited as the latest landlord with Grenfell cladding on site. Owned by shy proprietors David and Patrick Kennedy, it owns the freehold of Victoria Wharf, two sites Limehouse in East London, where leaseholders have so far “been forced” to pay £165,000 for fire wardens. LKP […]

The Grenfell cladding disaster for private flat owners got another airing last Saturday, this time in the Daily Telegraph. It claims that 143 private blocks have failed the governments fire safety tests involving 20,000 leaseholders. “The Government has said that the building’s owners have a “moral responsibility” to ensure that the bill does not fall […]

We are only billing leaseholders for the fire marshals not Grenfell cladding removal, says Slough Council is understood to have bought the freehold to the stricken site for £1 – officially, a ‘nominal fee’ – off freehold investor Robert Steinhouse Liverpool debt collectors JB Leitch to take the tribunal action Leaseholders at Nova House which […]